paid in instalments before June this year without any interest while any amount remaining unpaid thereafter can be paid by December-end with interest for the period of delay beyond June.
The department has told “payment of 50 per cent tax dues in lump-sum may not be insisted”.
Similarly, the department has also clarified that taxpayers can avail of CENVAT credit for tax paid under the voluntary compliance encouragement scheme after obtaining 'discharge certificate' from the department. The certificate will be issued by the department within seven working days from the date of furnishing details of payment of full tax dues.
Lowering of threshold for e-payment to Rs 1 lakh
This is something which has increased work for taxpayers but has to be watched out for nonetheless. Earlier, according to service tax rules, an assessee paying service tax of Rs 10 lakh or more, had to deposit service tax electronically. However, after the clarification, assessees paying Rs 1 lakh or more service tax in the preceding financial year will have to deposit the tax electronically, through internet banking, beginning this month.
Relaxes withholding on service tax component on payments to residents
The Central Board of Direct Taxes (CBDT) has provided a huge breather regarding withholding requirement on service tax component on all payments to residents.
“The board has decided that wherever... the service tax component comprised in the amount payable to a resident is indicated separately, tax shall be deducted at source. on the amount paid/payable without including such service tax component,” says the circular issued on January 13.
The tax department had received several representations seeking clarity on withholding tax. In this regard it had received several representations from tax payers. So basically now the TDS on rent paid, hotel charges, taxi services, among others would be levied after reducing the service tax component. This would ensure benefit of cash flows to service providers while would safeguard consumers from disputes.